HUD Housing Portfolios

The Department of Housing and Urban Development (HUD) has new, electronically based physical inspection standards for public and multifamily housing. Although HUD's new standards do not differ substantially from earlier ones, its procedures for administering the standards were substantially changed to include more specificity, such as a list of items that inspectors must review and definitions of what constitutes a deficiency for each item. HUD staff check and analyze inspectors' findings to score properties' conditions on a scale of 0 to 100. HUD believes that this system produces more objective assessments and allows HUD to target resources to properties that need the most attention. In performing quality assurance checks of property inspections, HUD reviewers found that about 35 percent of the inspections done in 1999 and the early part of 2000 did not meet HUD's inspection requirements. GAO found gaps or weaknesses in some quality assurance procedures. For instance, no procedures ensure that reviews are done systematically or that problems identified during reviews are quickly resolved. Public housing authorities and multifamily housing industry groups also had concerns about the reliability of HUD's quality assurance, with concerns that HUD may lack resources to efficiently implement its appeals procedures.

GAO noted that: (1) under the new physical inspection system, as in the past, the primary basis for HUD's physical inspection standards is the statutory requirement for decent, safe, and sanitary housing; (2) HUD's new standards require that both multifamily and public housing be decent, safe, sanitary, and in good repair; (3) while the new standards do not differ substantially from the previous ones, HUD substantially revised the procedures used to administer the standards; (4) HUD believes that the new system produces more objective assessments than those performed under previous systems; (5) these assessments provide a basis for targeting resources to the properties that need the most attention; (6) according to REAC's data, about 87 percent of the multifamily properties and 80 percent of the public housing properties reviewed as of April 2000 received scores of at least 60, which HUD considers satisfactory; (7) however, when REAC quality assurance staff performed on-site follow-up reviews to assess the adequacy of completed inspections, they often found that the inspections were not carried out consistently with REAC's requirements; (8) the quality assurance reviewers determined during follow-up reviews performed in 1999 and the early part of 2000 that about 35 percent of the inspections did not meet REAC's standards; (9) however, because these reviews were not performed on a random basis and the effects of the identified problems on the inspection scores cannot be readily determined, it is unclear to what extent the problems with the inspections affected the overall inspection results; (10) although REAC deserves credit for establishing quality assurance procedures, GAO found gaps and weaknesses in some of these procedures that substantially limited their effectiveness; (11) representatives of public housing authorities and multifamily housing industry groups that GAO interviewed also had concerns about the reliability of REAC's inspections; (12) they were concerned that the scores may not necessarily reflect the actual condition of some properties, noting that, in some instances, there were substantial differences in the inspection scores received by properties that had undergone more than one inspection; (13) they were also concerned that HUD may lack the resources needed to ensure the efficient operation of its appeals procedures; and (14) while some housing industry groups suggested alternatives to the current physical inspection system, none of the groups GAO contacted had conducted analyses to compare the cost and accuracy of these alternatives and HUD's current system.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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